Visa to fight EC over 10m competition fine

Visa upped the stakes yesterday in its long-standing battle with the European commission by saying it would appeal against a fine of €10.2m (£7.08m) for refusing to admit the US investment bank Morgan Stanley as a member of its payments system in Britain for more than six years.

Neelie Kroes, EU competition commissioner, said Europe's biggest credit card provider had excluded Morgan Stanley "without an objective justification" from its payment system from March 2000 to September 2006. This had restricted competition in the provision of credit cards for use by UK retailers. Visa, which controls 60% of the EU credit card market, finally relented a year ago.

She said: "The payment cards industry plays a key role in the creation and functioning of the single market for payments. The commission will not tolerate anti-competitive behaviour and will intervene if companies are illegally refused membership of payment card networks."

Visa is owned by 4,500 European banks, which have issued 320m cards used to make purchases and cash withdrawals worth €1.2 trillion a year. It accused Brussels of needlessly pursuing the case even after Morgan Stanley had withdrawn its complaint and had reached a settlement.

Peter Aycliffe, Visa Europe's chief executive, said: "We will appeal this decision. We do not believe that [we] infringed EU competition law. There is no value as a precedent to this decision."

Mr Aycliffe also charged that Ms Kroes had failed to resolve the issue of interchange - the fees charged by a card-issuer's bank to a retailer's bank to process transactions - and this threatened to curtail the growth of electronic payments.

EuroCommerce, a retailers' trade body, welcomed the fine as "sending the right message".